Elon Musk With Tesla Gigafactory Starts The Race To Secure Supply Of Lithium Batteries And Lithium.

I would like to share with you the very interesting summary from Seeking Apha on this subject. It confirms my personal observations of the investment and M&A trends in our Lithium industry today. I will share with you few quotes and links which will help you to understand International Lithium strategy and, what is very important, how our strategic partner Ganfeng Lithium sees this megatrends from the ground of the world's biggest auto market in the world in China.

"Mr. Kirill Klip, President, International Lithium Corp. comments, "The recent acquisition of the Taca Taca copper deposit by First Quantum Minerals confirms our strategic view that mining investment in Argentina will increase. Both Taca Taca and Mariana are located in Salta, Argentina, a mining friendly province and heart of the South American Lithium Triangle. Both Taca Taca and Mariana have rail and road access, in addition infrastructure development work at nearby Taca Taca will also benefit the Mariana project.

Now that we have secured 100% of the mineral rights to the project for our J/V with Ganfeng Lithium, an accelerated program to develop a pilot plant can commence. Subsequent feasibility studies will allow us to use Ganfeng Lithium's technological expertise and research facilities that we anticipate will reduce costs and improve efficiencies. The recently signed trade agreement between China and Argentina provides state-level support for our joint venture. Together we strive to become a primary source of lithium to meet the increasing demand of our strategic partner Ganfeng Lithium."

Mr. Wang Xiaoshen, Vice Chairman/VP, Ganfeng Lithium Corp. notes," The Mariana project has a high Potasium-Lithium ratio that gives the project a potentially high credit from the Potasium. This will make the cost of the Lithium resource very competitive. We believe this project will have a bright future considering the fast growing lithium demand for electric vehicles and plug-in hybrid electric vehicles ."

"Mr. Kirill Klip, President, International Lithium Corp. comments, "We are excited to spearhead this international collaboration and program that sets a precedent for sourcing metals that are imperative to the advancement of mobile devices, electric vehicles and alternative energy. The demand for Lithium is continually on the rise and there are shortage concerns which could impede on the growth of the green technology sector worldwide. The Irish government has taken this risk very seriously and pledged to facilitate the advancement of lithium production as part of an initiative to improve strategic metal supply chains. Together with Ganfeng Lithium, ILC has the opportunity to be part of this development and we are optimistic that we have a new potential source for the lithium battery supply chain".

Mr. Wang Xiaoshen, Vice Chairman/ VP, Ganfeng Lithium Corp. notes, "Recent news that corporations such as Tesla and Panasonic are making significant commitments to build gigafactory battery plants will significantly impact the demand for Lithium. Similarly the Chinese market will become increasingly more important to companies like Tesla in the near future. These two reasons make BLL an ideal prospect for the lithium industry."

Elon Musk moves very fast and now the doors to the world's biggest auto market are wild open. Superchargers will make Tesla Model S capable to compete with ICE cars and Chinese government will do the rest. Air pollution is the nation wide issue and now government in China has announced the war on pollution. Electric cars are the very big part of this battle plan. Now one thousand fast chargers are being built in Beijing along and all new residential development must be wired for the electric cars. The new mandate is in place calling for 30% of all state owned cars to be electric.

With the gigafactory, Tesla will have access to batteries at a cost close to $100 per kWh (at least three times cheaper than anyone else).

If big auto does not start work on its own gigafactories, they will have gifted the EV market to Tesla.

Tesla (NASDAQ:TSLA) has broken ground on its gigafactory site in Nevada and a deal with Panasonic has been reached.

Thanks to Tesla's previous capital raising efforts and an immediate commitment of roughly $300-500 million from Panasonic, it is clear that close to $2 billion is available for the gigafactory construction over the next year.

By this time next year, Tesla will be producing close to 100,000 vehicles per year (Model S+X) and obtaining further financing to finish the gigafactory will not be difficult (if required at all).

In the most recent Tesla conference call, Elon Musk suggested that "in light of the technical and logistical advances the factory would bring, he would be 'disappointed' if it took Tesla 10 years to make a $100-per-kWh pack, suggesting it could happen before the end of the decade."

"It's heading to a place of no contest with gasoline," Musk said. "In the absence of the Gigafactory, this progress would be much slower."

Since the gigafactory is not expected to reach full production before 2020, one can only conclude from Mr.Musk's words that he expects the gigafactory to be able to get battery costs down to $100 per kWh or below.

The best estimates place Tesla's current per kWh battery cost somewhere between $250-$300, while the rest of the auto industry is believed to be paying well over $400 per kWh for their EV batteries.

If the gigafactory is capable of reducing battery costs to $100 per kWh or below, Tesla will hold all the cards when it comes to the Electric Vehicle market.

One must remember that the gigafactory will only produce enough batteries for 500,000 vehicles and that to do this it must produce more lithium ion batteries under one roof than the entire world produced in 2013.

As I have written in my previous articles, nobody in the auto industry will be close to being able to produce as many Electric Vehicles as Tesla unless they embark on building their own battery gigafactories in the very near future.

For example, Nissan (by far the leader in terms of pure EV production within the mainstream auto business) has only enough battery capacity to produce 200,000 Leaf's per year -- and that's when its battery plant is eventually running at full production.

Of course we must remember that a Leaf has less than half the range of the base 60 kWh Tesla Model S, which means that currently, Nissan only really has the ability to produce less than 100,000 long range EV's per year. That's assuming they plan on challenging Tesla's 200+ mile range, $35k Model III (expected in 2017) and halting production of the current Leaf.

The rest of big auto has virtually no battery supply on which to draw. GM, with the Chevy Volt, is in a distant second place behind Nissan with its battery plant able to produce enough for just 60,000 Volt's per year at max capacity (or maybe less than 15,000 long range EV's).

These battery capacity figures are taken from my own research which can be found here (with original sources). Seeking Alpha."

Please Note our Legal Disclaimer on the Blog, including, but Not limited to:

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.

About Me

Legal Disclaimer

Small Print

"Past performance is not a guarantee of future returns."

Bernard Madoff.

All opinions expressed on this Blog are personal opinions of its authors, they do not represent any official position of any companies they can be involved with now, have been involved in the past or will be involved in the future. We have chosen our anonymity as the way to protect our freedom of thinking.

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

There is No intent of any copyright infringement in any way from the authors of this blog, we are relying on the Creative Commons in our work and in case if any owners of any content provided on this blog would like us NOT to use it, please indicate so in comments immediately.

Statements in articles on this blog other than purely historical information, historical estimates should not be relied upon, including statements relating to the companies' future plans and objectives or expected results, are forward-looking statements. News releases contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the companies' business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

This site does not constitute investment, legal, tax or other advice, nor is anything on this site a recommendation to invest in any security, or any other instrument, nor is this site to be relied upon when making investment or other decisions.

No Liability: No representation, warranty or undertaking, express or implied, is made by this Blog, its associated companies or any other person as to the reliability, accuracy or completeness of this site. In no event will authors or any of their associated companies or any of their partners, directors or other employees be liable to any person for any direct, indirect, special or consequential losses or damages of any kind arising out of any use of this site or in reliance on it from time to time, including without limitation, any loss of profit, business interruption, loss of programs or data on your equipment or otherwise.

SRSrocco reports on further deterioration of the COMEX Gold inventories available for deliveries. You can guess who is taking now a...

Total Pageviews

Dedicated to all those brave men who have been fighting the bear market in 2000 and buying the dips without understanding that they were looking straight into the abyss. Do not trust your money in anybody, for you are the one who is going to be rich or poor, not those that are advising you: always do your DD. Disclosure: We are putting our money where our mouth is.